Why having coffee with a competitor is one of the best things you can do

Meeting with a competitor for coffee might not sound like something the boss would approve of. But perhaps you should think again.

Traditional competitors are putting aside professional differences to meet and share ideas in a new way of thinking that is gaining traction in workplaces around the world.

This approach is increasingly being referred to as ‘co-opetition’, which is a cross between competition and collaboration. And it’s enabling organisations to drive greater synergy and innovation in the workplace.

Co-opetition arrangements refer to organisations that would normally compete against each other understanding that they can gain greater synergies and competitive advantage by collaborating.

According to the executive education facilitator and program director at the Melbourne Business School, Dr Judy Kent, companies that draw a tight protective circle around themselves can fail to learn and grow. But those that subscribe to the ‘abundance’ theory are more likely to be open to new ideas.

According to a paper she wrote about co-opetition, it is sometimes referred to by analysts as ‘sleeping with the enemy’.

The paper explains that it can be hard to define competitive advantage these days with the blurring of boundaries through outsourcing and through alliances between customers and suppliers.

She writes: “These days, especially in the IT industry, there are whole cohorts of technicians outsourced to other companies. They are physically located in their customers’ premises and largely indistinguishable from that company’s employees.

Sometimes they don’t step foot in the company which pays them from one year to the next. Whose culture do they subscribe to? Which company do they feel part of? Where do they get their identity, loyalty and authority from?”

She continues by explaining that the boundaries are blurred even more as companies seek to partner with other companies that have traditionally been seen as the competition, now often referred to as co-opetition.

The paper explains that the word was coined by Roy Noordan, founder of Novell, and popularised by Adam Brandenburger from Harvard and Barry Nalebuff from Yale (1997). The pair designed a business simulation around the term which they describe as ‘a revolutionary new mindset that combines cooperation and competition, the game theory strategy that’s changing the game of business.

Dr Kent says: “Collaboration and establishing a strong network is critical for success in today’s commercial world. Competing procurement managers should come together and discuss their operations because more often than not, one and one makes three, and both companies can benefit from the synergies to be gained by looking at things through a different lens.”

The Melbourne Business School’s Procurement Executive Program has found that procurement managers from competing industries can learn a lot from each other to take back to their own organisations, but they know where to draw the line on sharing strategic information that should be kept in-house, she says.

Meeting with a competitor doesn’t imply that you have to share sensitive information with your competitors.

“You can have a relationship with them and discuss universal issues of people and process management without giving the game away,” Dr Kent says.

Interestingly, the Harvard Business Review Blog Network wrote about co-opetition recently. Author Marquis Cabrera wrote that sharing information is a good way to build trust with competitors in the lead-up to a co-opetition arrangement.

Cabrera says that these partnerships have also worked well for businesses that create new technologies given the high costs associated with research and development.